Achieving Privacy in Offshore Transactions: What You Need to Know
Offshore transactions have long been considered a way to achieve financial privacy. However, recent changes in legislation mean that achieving privacy from tax authorities is now nearly impossible. The implementation of measures targeting terrorist financing and drug dealers, as well as the Foreign Account Tax Compliance Act (FATCA), which requires foreign banks to report U.S. citizens' accounts and transactions to the IRS, mean that privacy in financial dealings has been eroding since 2000.
Despite this, it is still possible to achieve privacy in offshore transactions and protect assets from future civil creditors. One way to do this is to set up an offshore corporation, LLC, or trust in a country that doesn't maintain a public registry or searchable database that reflects officers, directors, or settlors. Smaller jurisdictions such as Belize, Nevis, and Cook Islands are recommended for this purpose.
However, if a bank or merchant account is required in a country with a public registry, there is a way to maximise privacy while still complying with regulations. By forming an LLC in a country without a public registry, such as Belize, and using that company as the officer for a Panama corporation, it's possible to achieve privacy in an offshore transaction involving a Panama structure.
While privacy from tax authorities is no longer possible, it's still worth considering offshore transactions to achieve privacy from future civil creditors. The important thing is to set up the structure correctly and comply with all relevant regulations.